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If oligopolists engage in collusion and successfully form a cartel, the market outcome is
- a)The same as if it were served by a monopoly
- b)The same as if it were served by competitive firms
- c)Efficient because cooperation improves efficiency
- d)Known as Nash equilibrium
Correct answer is option 'A'. Can you explain this answer?
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If oligopolists engage in collusion and successfully form a cartel, th...
Market outcome under cartelization of oligopolists
When oligopolists engage in collusion and successfully form a cartel, the market outcome is:
A. The same as if it were served by a monopoly.
Explanation:
A cartel is an agreement between firms to limit competition by coordinating prices or output. Oligopolistic firms may form cartels to maximize their combined profits and reduce uncertainty in the market. The market outcome under a cartel is similar to that of a monopoly because both involve a single seller or a group of sellers acting as a single entity.
The market outcome under a monopoly is characterized by:
- Higher prices: The monopolist can charge a higher price because it faces no competition.
- Lower output: The monopolist produces less than the efficient level of output to maintain high prices.
- Deadweight loss: The difference between the efficient level of output and the monopolist's output creates a deadweight loss, which represents lost consumer and producer surplus.
Similarly, a cartel can charge a higher price and reduce output to maintain high prices. This leads to similar market outcomes as a monopoly, including higher prices, lower output, and deadweight loss.
In summary, when oligopolists engage in collusion and successfully form a cartel, the market outcome is similar to that of a monopoly.
When oligopolists engage in collusion and successfully form a cartel, the market outcome is:
A. The same as if it were served by a monopoly.
Explanation:
A cartel is an agreement between firms to limit competition by coordinating prices or output. Oligopolistic firms may form cartels to maximize their combined profits and reduce uncertainty in the market. The market outcome under a cartel is similar to that of a monopoly because both involve a single seller or a group of sellers acting as a single entity.
The market outcome under a monopoly is characterized by:
- Higher prices: The monopolist can charge a higher price because it faces no competition.
- Lower output: The monopolist produces less than the efficient level of output to maintain high prices.
- Deadweight loss: The difference between the efficient level of output and the monopolist's output creates a deadweight loss, which represents lost consumer and producer surplus.
Similarly, a cartel can charge a higher price and reduce output to maintain high prices. This leads to similar market outcomes as a monopoly, including higher prices, lower output, and deadweight loss.
In summary, when oligopolists engage in collusion and successfully form a cartel, the market outcome is similar to that of a monopoly.
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If oligopolists engage in collusion and successfully form a cartel, th...
Engaging in pollution means formation of cartel by all the producers for selling goods at higher prices. This will be similar to monopoly as there is only one seller.i.e. the cartel
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If oligopolists engage in collusion and successfully form a cartel, the market outcome isa)The same as if it were served by a monopolyb)The same as if it were served by competitive firmsc)Efficient because cooperation improves efficiencyd)Known as Nash equilibriumCorrect answer is option 'A'. Can you explain this answer?
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If oligopolists engage in collusion and successfully form a cartel, the market outcome isa)The same as if it were served by a monopolyb)The same as if it were served by competitive firmsc)Efficient because cooperation improves efficiencyd)Known as Nash equilibriumCorrect answer is option 'A'. Can you explain this answer? for CA CPT 2024 is part of CA CPT preparation. The Question and answers have been prepared according to the CA CPT exam syllabus. Information about If oligopolists engage in collusion and successfully form a cartel, the market outcome isa)The same as if it were served by a monopolyb)The same as if it were served by competitive firmsc)Efficient because cooperation improves efficiencyd)Known as Nash equilibriumCorrect answer is option 'A'. Can you explain this answer? covers all topics & solutions for CA CPT 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for If oligopolists engage in collusion and successfully form a cartel, the market outcome isa)The same as if it were served by a monopolyb)The same as if it were served by competitive firmsc)Efficient because cooperation improves efficiencyd)Known as Nash equilibriumCorrect answer is option 'A'. Can you explain this answer?.
If oligopolists engage in collusion and successfully form a cartel, the market outcome isa)The same as if it were served by a monopolyb)The same as if it were served by competitive firmsc)Efficient because cooperation improves efficiencyd)Known as Nash equilibriumCorrect answer is option 'A'. Can you explain this answer? for CA CPT 2024 is part of CA CPT preparation. The Question and answers have been prepared according to the CA CPT exam syllabus. Information about If oligopolists engage in collusion and successfully form a cartel, the market outcome isa)The same as if it were served by a monopolyb)The same as if it were served by competitive firmsc)Efficient because cooperation improves efficiencyd)Known as Nash equilibriumCorrect answer is option 'A'. Can you explain this answer? covers all topics & solutions for CA CPT 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for If oligopolists engage in collusion and successfully form a cartel, the market outcome isa)The same as if it were served by a monopolyb)The same as if it were served by competitive firmsc)Efficient because cooperation improves efficiencyd)Known as Nash equilibriumCorrect answer is option 'A'. Can you explain this answer?.
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